Monday, February 06, 2012Last Update: 12:15 PM PT

Illinois A.G. Goes After Robo Signer

CHICAGO (CN) - In suing Nationwide Title Clearing, Illinois Attorney General Lisa Madigan provides a look at the "assembly line procedures" in which "signers" signed thousands of mortgage documents a day, often under penalty of perjury, without even reading them. Illinois sued Florida-based Nationwide Title Clearing for consumer fraud and deceptive trade, in Cook County Chancery Court. In the complaint, Madigan calls Nationwide Title Clearing "a document production factory." "NTC has created, signed and recorded hundreds of thousands of documents for financial institutions within the mortgage industry. ... These documents have been recorded in county recording offices throughout Illinois and across the nation," the complaint states. "NTC creates these documents through highly compartmentalized, assembly-line procedures. NTC 'signers' occupy an essential position on the assembly line. "NTC signers sign their name on thousands of documents per day without reading the documents they sign and without verifying the information contained in the document - even in documents that claim to be made under oath and based upon the signatory's personal knowledge. And, in some instances, NTC signers don't sign documents that, nonetheless, bear their signature. In these instances, NTC has affixed the putative signature of the NTC signers outside the presence, knowledge or control of the purported signatories. "These kinds of acts and practice became commonplace in the mortgage servicing industry in the rush to trade mortgage-backed securities during the buildup of the housing bubble and in the push to process foreclosures as quickly as possible in the aftermath of the housing market collapse." Madigan said in a statement: "The practices that NTC used were a key contributor to the mortgage crisis by undermining the integrity and accuracy of the mortgage servicing and foreclosure process." Madigan said Nationwide, of Palm Harbor, Fla., provides services to eight of the top 10 lenders and mortgage services in the country. The company has worked with Citi Residential Lending, Ameriquest Mortgage, Financial Freedom Senior Funding Corp., GSF Mortgage Corp., Bank of New York, and JPMorgan Chase. According to the complaint, "When a financial institution hires NTC, the financial institution executes a 'corporate resolution' that designates certain employees of NTC as corporate officers of the financial institution, typically under the title 'vice president' or 'assistant vice president.' "These NTC employees are granted a limited authority to sign certain documents on behalf of the financial institution. "These employees have no other authority or responsibility to the financial institution - their only authority is to sign certain documents. "These employees are typically called 'signers'." The complaint cites a mortgage assignment recorded in Sangamon County, home of the Illinois state capital. "The assignment was signed by Crystal Moore, as a purported 'Vice President' of Citi Residential Lending Inc.; Citi Residential Lending Inc., itself, was acting as 'attorney-in-fact' for Ameriquest Mortgage Company," the complaint states. "Crystal Moore is not, however, a vice president of Citi Residential in any traditional sense of the term; instead, she is actually an employee of NTC and a 'vice president' of that financial institution in name only, as the extent of her responsibility and authority is to affix her signature to certain documents created by NTC. "Instead, the NTC signers work at and for NTC; they receive their compensation, oversight ,and instruction from NTC. "In other words, despite the title appearing under their name on documents recorded throughout Illinois, the NTC signers are not 'corporate officers,' as that term is commonly understood, of the various financial institutions for which they sign. "Instead, the signers are actually employees of NTC. "Despite the very limited breadth of authority provided by the corporate resolution, the NTC-created documents tout the signers as 'vice presidents,' and "assistant vice presidents,' and other corporate titles without limitation at large financial institutions. "These designations neither disclose that the signer is a 'vice president' for signing purposes only not that the signer's authority to act for the financial institution is limited only to signing documents. "And, as described more fully below, these designations never disclose that the 'vice president' signing the document has not, in fact, read the document that he or she is signing." The complaint cites an "affidavit of lost assignment" signed by NTC "vice president" Brian Bly, in Kane County, Geneva, Ill. As is typical, the cited affidavit "actually contained the following line: 'I declare under penalty of perjury that the foregoing information is true and correct to the best of my knowledge.' "Again, this affirmation is misleading since Brian Bly admittedly does not read or verify the documents that he signs. "Further, the affirmations and the affidavits as a whole imply that a high-ranking corporate officer of one of the parties to a transaction actually has made a review of the records pertaining to that transaction and has drawn conclusions based upon that review. "Nothing could be further from the truth as Bly does not read or verify the documents he signs. "Nonetheless, Bly has signed these affidavits as 'vice president' of Citi Residential Lending, Inc. and 'Assistant Vice President' of the Bank of New York, without limitation or qualification, and has attested to conducting reviews and drawing conclusions purportedly made in those capacities when, in fact, he did not. "The falsehoods are not limited to affidavits." Bly is not named as a defendant. Some county recorders' offices accept documents electronically. In those cases, "in deposition testimony, employees of NTC have admitted that NTC signers play no role in the creation of the electronic documents and that their signatures are affixed by other employees at NTC," the complaint states. Madigan seeks an injunction, disgorgement of profits, penalties for unfair and deceptive trade, and wants Nationwide ordered "to locate, review and remediate all documents created by NTC and recorded within the State of Illinois by use of method and practices declared unlawful". On Sunday, New York Times business reporter Gretchen Morgenson wrote a long piece in the Times Business section on the Mortgage Electronic Registration System's role in the fiasco.